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Coinbase And Blackrock Team Up For Novel Tokenised Ethereum Fund
- BlackRock is working with tokenisation company Securitize to deliver a new financial product to its investors.
- The Ether-based fund will be sold at USD $1 per token, providing investors with yield from cash, bonds and other TradFi assets.
- Coinbase will be providing core infrastructure for the fund, named BUIDL.
BlackRock’s first foray into the world of cryptocurrency has been a successful one. The financial giants were one of the first off the block after the SEC approved trading Bitcoin ETFs – and they have now amassed over USD $10B (AUD $15B) in assets under management.
Related: Bitcoin Rallies on Favourable FOMC Meeting Outcome
On the back of such outstanding performance, BlackRock is continuing to dive further into the blockchain hemisphere, this time partnering up with Coinbase and Securitize to deliver a tokenised Ether fund.
This is the “Progression of [Our] Digital Assets Strategy”
Tokenisation is touted across the industry as the technology that will once and for all bridge the gap between traditional and digital finance. Turning real-world assets into virtual tokens unlocks a swathe of possibilities for fund managers like BlackRock – and this is something they want to capitalise on.
This is the latest progression of our digital assets strategy…We are focused on developing solutions in the digital assets space that help solve problems for our clients.
Robert Mitchnick, BlackRock head of digital assets BlackRock is working in conjunction with RWA company Securitize, as well as employing Coinbase to provide the infrastructure for the fund. Securitize’s CEO, Carlos Domingo, spoke to the importance of tokenisation and these new partnerships.
Tokenisation of securities could fundamentally transform capital markets. Today’s news demonstrates that traditional financial products are being made more accessible through digitization.
Carlos Domingo, Securitize CEO The Ethereum-based fund, named BUIDL, will be offered by BlackRock to qualified investors at $1 per token. The token will generate yield from traditional means such as cash, treasury bills and debt – so there is no real DeFi involvement in that sense.
There’s no denying that RWA tokenisation sits at the intersection of traditional and blockchain-based finance. The collaboration between BlackRock and Coinbase is another coup for the industry – however, it’s worth asking the question: At what point does centralisation become a problem?
Related: Top Analyst Ran Neuner Unveils Next Big Narratives in Current Crypto Rally
The introduction of TradFi into the crypto industry is an important one for the market to mature. And this new fund has no direct impact on the crypto markets anyway. But BlackRock already owns an extremely large portion of global wealth. It’s not unforeseeable that crypto follows the same path. As a concept literally geared to avoid this very occurrence, is this the path the community wants to see crypto walk?
Only time will tell.
Author
Ben Knight
Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.
